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tv   Power Lunch  CNBC  June 7, 2013 1:00pm-2:01pm EDT

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we will see you at noon on monday. i'm sure power lunch, we will continue to follow that story. pete? >> i like the housing stocks. i'm going with home depot. >> responses. >> jah. >> american airlines. >> all right. have a great weekend. power lunch picks up the fall right now. >> halftime is over. power lunch and the second half of the trading day starts right now. >> scott, thanks very much. i guess they like the jobs report. the bulls seem to be back big time. be quiet now. they are listening. they are watching. they are reading. the government's secret way of mining information. it's not a secret any more if it ever really was. what does it mean to companies that have been helping and what does it mean for the ways that we communicate? and a serious storm is nutritioning its way up the east coast.
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flooding, the order of the day. sue is off at this hour. >> we have seen some of the rain coming up through new york city. the markets have been on the move all day long after it is reported that 175,000 jobs were created in may. largely because of more people joining the work force. the dough, s&p 500 and nasdaq all in positive territory. you see the dough up. the s&p 500 up about 15. gold falling sharply after that report as well. now it's down. ten-year you have seen prices fall on that, too. 96-46 there. bob, i'm sure people are buzzing about this.
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>> we have moved almost 300 points. just right enough to think that the economy is improving. and that the fed is comfortable. the fed is said to be on track. that's the key statement there. we had the reports up. that means the yen weakening and the dollar strengthening. there is the chart in the time. it has been pretty good.
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also is down today. so it's not all perfect across the board but pretty good buy and large. >> risk is on today by and large. . >> so much about the economy steve has another flash fed bowl springing up. >> thanks a lot. we have taken out the pedommer the here to see what this data means for fed policy and the economy. let ego to the results and we will come back and see where that ranks.
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94% say nothing change. was there an economic effect? 17% saying slightly stronger. moving on to the effect. i guess we don't have additional data but let me give it to you. we're going to adjust this thing. we're going to say that today's data is slightly easier. are those bond yields up because the market believes in less qe or is it pricing in better growth? er eem voting on the latter. >> steve, there is certainly
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people today in both camps. we have heard it all day here. the treasury prizes taking a hit here. we are here to talk about it. jeff, we will start with you and i want to put that question to you. at the beginning of the trading day as soon as that report came out we saw stocks come up but we also saw yields shoot out. >> that's where this move is selling in may of treasuries. that number had something for everyone. we're okay right now. so the lights are still on. there is another round of drinks being bought here. as we see it now, volatility will be suppressed.
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we don't like that. >> we hit 18 yesterday. we came down on the vix today. a lot of people saying the 4% pull back that we saw was not quite healthy enough. >> i think it can turn on a dime. i think we will see a technical continuation. >> tyler? >> all right. this is a movie that we know what the ending is going to be. did we learn today that the tapering is likely not to be sooner but maybe a little deeper. >> when you look at the jobs numbers which came out today.
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most people say i don't think it's going to have much of an impact. bernanke has made it very clear. if that happens, it's probably a good thing for assets. >> good thing for risk assets. the implication then is what? >> certain sectors attempt to perform a little better. financials, we know they have gotten beaten up since the crisis. rising rates will make them a little more profitable and you want to stay away from the defensive higher yielding areas. i think treasuries will get
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crushed. >> a lot of people are saying that jeff, that the bond market is not the safe place to be given what we seem to know is going to happen eventually here. >> well, i respectfully disagree. we are seeing the fed not going to come in and taper. they just can't. we're not seeing that. >> it's interesting to see that unemployment ticked up because more people started looking for work and re-entering the work force but it does budge you a little farther away from the fed's bunch mark to start easing or tapering that policy. it would be interesting to ask david what do you think about the 6.5%? does that go away now that we started to see steady gains? >> let's just be clear. there is a big difference
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between the fed tapering and the fed tightening monetary policy. are we looking at some potential costs down the road? does it make sense? >> back to jeff's points and i -- i am not egging you on to disagree but frankly bond yields have gone from 160 to 215 now. that's already clipping your total return, right? >> it's absolutely right. take a look at bond markets today. very few benchmarks today in positive territory and that's just been on the back after a very, very mild increase in rates. if the fed gets off of the yield curve and hearing the rhetoric, that seems like what is going to happen, i would suspect that you would see interest rates up a bit further. >> have a great weekend. thanks to you as well. meanwhile, down to you. >> thanks.
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we're watching big movers on the board here. shares of walmart up into the green just lightly off of the highs of the day. the company announcing today a new $15 billion buy back program at its annual shareholders meeting. the stock is up 12% year to date. shares of general motors up as well. it's going to raise about a billion dollars, most of that goes to taxpayers. up about five and a half%. royalty pharma increasing to $13 a share. and also, big news today. president obama is in california preparing for a key meeting with china's leader. eye on the agenda, chinese
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hacking of american companies. we have got his answer in two minutes.
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>> tivo taking a hit. investors not pleased with the 490 million dollars it will receive to settle a lawsuit.
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cisco systems and time warner cable. the stock had been up but not so much now. down 17%. they are all higher. . >> the information gathered by the government, president obama's summit with china's leader. wanting to know about was those recent concerns about security he is in washington. first to john harwood live just outside of palm springs. john, we will send it first to you. >> the president faced a major league fire storm over surveillance. going to try to crack down on chinese cyber hacking so the
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president took the opportunity of a question on an event on obama care and try to put out that fire storm. he said a lot of the headlines have been hype and he tried to speak directly to the american people to persuade them he is mindful of the trade off and he is striking the balance right. >> i think it's important to recognize that you can't have 100% security and also then have 100% privacy. and zero inconvenience. we're going to have to make some choices as a society. the fact that they are under very strict supervision by all three branchs of government and that they do not involve listening to people's phone calls, do not involve reading the e-mails of u.s. citizens or u.s. residents, absent further
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action by a federal court that is entirely consistent with what we would do on a criminal investigation. i think on balance, we have established a process and a procedure that the american people should feel comfortable about. >> tiler, one thing to keep in mind when you sr. the public reaction to this. some of the same people were highly critical of the secret drone campaigns. 66 of americans said they do approve of the drone project. >> now to more on what's being targeted and what is being done with it. this is really a data scrub,
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isn't it? largely? >> that's exactly right. what we know so far is a little bit fuzzy. nbc news has confirmed the existence of the prism program. are the u.s. government spies here able to tap directly into their servers? many of the companies have set no that the u.s. government is not tapping in. that raises the question of whether there is an indetect way of tapping in. these discussions have wrinkled people in the intelligence community. what you heard from president obama there was very, very different from what we heard from the director of national intelligence just last night in a statement.
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he said the articles refer to cleks of information. they contain numerous inaccuracies. this is reprehensible and risks important protections for securities of americans. you certainly did not hear the president use the word reprehensible in describing the news accounts of those. the president said that he welcomes the debate. a big divergence between the way the director is doing this. >> i'm curious in a washington where bickering and battling is so rif, it feels to me as though both parties are being very careful about what they are saying here, trying to walk a very fine line on this program. why don't you answer first.
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it's more of a continuing of libertarian to establishment. you have some members very upset about this. they think these programs are necessary and right. you saw the republican chairman of house intelligence come out and say that this verizon phone number gathering program actually prevented an attack, a terrorist attack on u.s. soil. a lot of defense here from some of the establishment members. >> john, your thoughts? >> well, i agree with that but i do want to point out as a matter of context and perspective, this is an argument that libertarians consistently lose.
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remember this was done by the bush administration as well as the obama administration. so civil libertarians may object to what both have done but they're on the short side of the argument. >> thank you very much. we will foe low this throughout the rest of the day and john following the meetings between mr. obama and president xi. >> tropical storm andrea speeding up the west coast. long commutes and weekend plans ruined. the forecast is up after the break. [ male announcer ] with wells fargo advisors envision planning process, it's easy to follow the progress you're making toward all your financial goals. a quick glance, and you can see if you're on track. when the conversation turns to knowing where you stand, turn to us. wells fargo advisors. where you stand, turn to us. she's always been able it's just her but your erectile dysfunction -
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>> let's give you a dough check right now. it has been higher all day. three dow components are driving the index higher. boeing at its highest point in over five years and cisco systems trading at levels not seen since august of 2010. >> we know tropical storm andrea is making her way up the coast right now. this is a video from gulf port florida, dumping rain on western
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florida. the storm now moving north. we have had pretty nasty weather here in new york. >> we're still tracking the system. still a tropical storm. . you can kind of see the center of circulations. and you mentioned new york city. some of the rain started yesterday a with a frontal system. that could prompt some water risers. you may see one to three feet of water on the coast.
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and say three plus is. it is moving quickly. and the wind field expands so for many areas including new york it's primarily a rainmaker and there is a look at the rain forecast. your weekend is not totally lost especially as you get in kpauds saturday morning. still coastal maine dealing with a number of threats let's say the flash flood watches. so, a number of separate angles to keep an eye on. >> all right. warm up storm. extra tropical. meanwhile we do have stops that
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are moving especially at the nasdaq. apple among them. let's head down to seema. >> a notable rally in tech. giving hope to traders that the fed won't taper in the near term. some of the big winners include sales apple also staging a turn-around. likely announcements include supported i-radio service. the best performing stock making an acquisition earlier this week of a security management firm today upping its price target on
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shares of ca tech. >> the metals market is just about to close. we will send it over to you. >> we are seeing gold on pace to close for the biggest one day dollar drop. it really just fell out of the gate. once we got the number on the jobs report. silver is really the bigger volatile player here, off more than gold. today poised to close at its lowest in september 2010. set to be closed for the near foreseeable future. copper tied to the economy. as the economy looks a little bit better and jobs look a little bit better, copper is holding up better than the rest of the complex.
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back to you. >> thanks so much. this morning we had allen greenspan. here is what he had to say. >> tapering is obviously the first thing. but tapering is still increasing the size of the balance sheet and that means it's going to be a little bit more difficult to reverse it. i'm a little concerned that the reversal is more difficult than we may think. >> that was the former head, alan greenspan. tapering is still increasing the balance sheet, something the fed should not be doing. >> he is making a radical argument that i don't think the street is ready for and that is that they should stop tapering right now. i don't think the fed is ready for that right now.
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everybody can now say the fed is probably now comfortable with this policy that they have got. let's move on here. there was an article out saying the fed is on track to reduce its buying program. as long as the economy doesn't disappoint. >> largely a defensive market up until about midday yesterday. there is the movers. the first ipo in ages from china yesterday. i was at a conference and did not cover this. light in the box went public priced 8.3 million dollars at
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$9.50. we have not had an ipo in ages. and basically they just simply dried up. the big one everyone is talking about is ali baba. obviously they will go to hong ko kong. would they do a split listing in the united states? >> it will be a big enough offering. that's the one that the market will be watch iing certainly a great day for light in the box. now to the bond market. rick, what's the latest? >> you know? in the old days when you have 250 or 300,000 number on no
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non-farm, the chart would look a lot like the chart you're looking at now. if you look at the tradeable range, this was right after we broke out we are probably challenging that high yield close. let's go to may first on dollar yen. clearly see we have had huge moves. why is it so important? memorize that chart. now look at this chart. toyota. that's what it's all about. look similar? they do. >> and suing ford for liable accusing him of only being worth $20 billion. he says he is worth much more. obviously a very important story right robert?
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estimates of wealth he says it's $29.6 billion. he is long concerned about his image in the west. he lives large with a private jumbo jet, a 420 room palace and properties around the world. his claim says his wealth is misstated by undervaluing certain shares and assets. >> robert, before you go i want to ask you about a report out showing a household wealth has jumped to pre-recession levels. how are you interpreting those numbers today? >> it was a fascinating number saying that american household wealth is now up to 70 trillion dollars.
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that is above the peak in 2007 on inflation adjusted basis. a lot of americans are not feeling it. we have a story saying that because a lot of the wealth has been in stocks and stocks are still very concentrated among the top five percent of americans. >> the president responded that the embassy is under attack. what do the left and the right say. plus new accusations by irs workers targeting political groups. is there not enough outrage on this? it depends what channel you watch. and jobs? right or wrong direction? first, be ware of the taper. >> if there is a true taper, there better be a true taper. >> the taper. it's become the talk of wall
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street. but before there was the taper, there was the taper. we found this one at the zoo. they are native to central and south america where they are the continent's largest land mammal. they lake tike the water and li sleep. >> a lot of people think it is an about eater. it would buy any stock related to something they would want to eat. >> that's the taper. we're more than just about bulls and bears. they're back in two minutes. [ kitt ] you know what's impressive? a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say? ♪
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>> yum brands moving higher after it is upgraded to a high. an creased its price target 7 bucks a share. results in china hit by worries that kfc beginning next week,
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nearly a year after being approved by the. >> ceo of the national urban league, former mayor of new orleans along with ron christy. >> always good to see you this month but especially this time. let's do it differently. we will get to that in a moment. >> but i want to start with the surveillance programs. should we be worried about this? is our privacy endangered? >> yes, i think it is. in the bush administration, we were specifically looking at al qaeda terrorists and monitoring their phone conversations. now you find that apple is
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having some of their data. >> i tend to agree are ron on this today. these -- this surveillance is overbroad. this looks like this is an effort by the national security agency to create a data base of american telephone company and internet service provider customers. you have to say that the nsa and administration follow the proper procedure but this is extremely overbroad. it raises questions as to what has happened. >> might some of this kind of method data research, might it under some circumstance have turn up tsarnaev and his brother and the communications that they were engaged in and potentially the websites they were visiting? that might, might, might have led to breaking up of that?
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>> the question is was there a less intrusive way to do this? if the target is a foreign government or foreign agent. it's important that they limit it. >> it might have, it could have but it's overbroad. we need to have a limited and narrow scope. >> get these two guys in the same room and they agree with each other? now let's see if we agree on the jobs numbers. the market seems to be looking at it as a goldilocks number. it has got something for everybody. jobs growth. unemployment went up. that means maybe the fed is not going to clamp down on bond buying quite as quickly. >> what these numbers reflect is consistenty.
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the tough side is it's not sufficient to bring down the unemployment rate. i think we need additional actions by the congress and president to bring down the unemployment rate. >> i suppose you could say the rate went up because more people came in and started looking for jobs. that is a good sign that they were encouraged to not be disaffected workers. on the other hand, the rate went up and the job growth is not over 200,000. >> again, if you look at the real net effect of the jobs report, it's middle of the rote. it's still very high. near nearly 14%. there are still millions of americans who are unemployed or
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underemployed. >> let's transition to the last one and hear some political red meat and that is the irs scandal involving those employees in cincinnati. are we and is the left not outraged enough about this? >> i think the left has not been as con sis tently outraged as they should be. this is one entity that can compel americans without very little recourse to fall under their will. now people are targeted for being pro-israel? that is outrageous. everybody should be outraged by this instrugs. >> there is a long pattern at the irs.
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a decade ago, so you're not going to get any argument with me of the principle that the irs should be non-political in every president. its application and enforcement. it happens that this time, that you see some conservative interests having the same time of us had. i think. to determine if this was being undertaken by rogue employees of the irs. >> where i come at this and make it quick is it's a legitimate task of the irs to look at applications but what is student
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is to stargt groups based on their name or politics. >> and to hold up their applications for months and years. >> they are slow on 501c 3 applications in general. >> then are they doing things that are not consistent with what the laws say? >> great to see you. i hope we will do this again next time. >> come back. >> kay la, back to you. >> i have a feeling that debate will continue but up next we have the power house. we travel to the top real estate markets in america. today, the miniapple, minneapolis. before reminding ourselves that some bonds are more valuable than others... and before weighing the ups and downs in your life
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>> coming up on street signs, the cicadas are here after 17
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years. what dow stock has performed the best and what will be the best when it emerges 17 years time from now? and courtney is back from the launch of jcp home? will it move the needle? says it's not for the faint of heart. . we have a real white coat doctor. we're going to have an analyst here as well. a really interesting block here coming up. stick around until noon. >> all right. thanks very much. >> beautiful town. sophisticated town. a little chilly in the winter but boy they love it out there. >> 7,55.
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property on average on the market, about three months and the month sfupply of inventory about three months. >> a compact house. tell me why you like it. >> i like it for a variety of reasons. the location is very desirable. back in the 1940s. and people loved to be located close to the park system and the twin cities. so this property has been updated. primarily a post world war ii neighborhood.
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a greatover sized lot. a little something for everyone. >> very nice and priced at $269,000. moving up in price is in st. paul. wonderful town. listing for $419. $5800 a year in taxes. four bedrooms, two baths, $2100 in taxes. >> it is tudor style. i think everyone was moving west and they got to the mississippi river and said i think this is a good place to stop. it's a beautiful home. we have got a lot of basement space. this one has been nicely updated.
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we have had more rain than seattle in the past month. it's still hot and we're excited about that and people are smiling and fooling great. >> 1.195 million. six beds, three full, two and a half. this must be a show piece. this is in the neighborhood called lowery hill. one of the titans in industry. i think he would be excited to see how well the home is maintained. it was built in 1906. a grand staircase. sitting rooms and it's a gorgeous house with a little of everything. >> that really looks beautiful. all freshly redone. thank you very much. move to minneapolis.
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1.195 goes a long way. kayla, down to you. >> thanks. [ female announcer ] there's one thing
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welcome back. texas took the top spot last year for america's top spot for business. the state has been trying to keep the momentum going. >> last year texas won its third title as america's top state for business. could it be our first back to back winner? a triple a credit rating. even president obama had praise for this decidedly red state.
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the pressure is on. >> california governor gerry brown dismissed the add campaign as barely a fart. can we say that? >> this is where it is does that really win jobs? some experts are not so sure. >> about 30,000 according to a report that came out recently. >> but every little bit helps in the race for jobs and the race to be or remain america's top state for business.
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>> a quick market flash. take a look at utek. somewhat unusual to see stepping in with a midday downgrade but that's what analysts do. they downgrade ultra tech from neutral. you can see that it takes a dive here. guys back to you. >> thank you very much.
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>> power lunch begins now. >> and the dough is now back in black for the week and what a week it has been. this is market that does have nine lives, maybe cat's eyes. we are going to take a special street signs look at what has been and what is to come. and in hon


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